The price of cocoa has had a recent surge due to a global supply shortage. This has put candy companies who specialize in chocolate candies on the ropes and forced them to make difficult decisions to cut cost while maintaining their customer satisfaction. Some of these changes come highly contested by consumers.
Chocolate companies are grappling with the new reality of unaffordable cocoa. Cocoa prices have increased drastically due to supply shortage, minimal investment in cocoa farms, and investor hesitation. Not to mention, the world’s largest cocoa producers in West Africa are battling draught and disease as well.
Some of the biggest chocolate companies like Mars Inc. and Hershey Co. are forced to make difficult decisions in order to stay profitable. Unfortunately, this typically means the consumer ends up paying for the difference.
Mars Inc. implemented one strategy in which they reduced the size of their chocolate bars in order to save on cocoa. The new bars are 10-grams smaller than that of previous bars and yet they cost the same. Thus, the customer is paying the same amount for less chocolate, but it does improve profit margins for the company.
Other companies, such as Hershey Co. are implementing creative strategies to use less chocolate as well. Hershey introduced new flavors of candies that are dipped in chocolate instead of filled with cocoa. Their Chocolate Frosted Donut Kit Kat Bar is one such example. Since the candies are dipped instead of filled with chocolate, they are able to use less of the coveted ingredient.
This trend has become popular across chocolate companies. Most companies offer many different fillings in their bars such as nuts, fruits, or caramels. All of which help reduce cocoa cost in comparison to pure chocolate bars.
Other companies are pursing cocoa alternatives to save their profit margins. Cocoa butter is the ingredient that is found in almost all milk chocolate bars but companies have found that substitutes such as palm oil are actually much cheaper.
While companies are trying to come up with creative ways to combat rising cocoa prices, the question of quality and customer satisfaction remains. With high inflation and companies filing for bankruptcy left and right, businesses like Mars Inc. and Hershey Co. must fund the right balance between cost reduction and customer happiness.
